Disclaimer: Each post is for informational purposes only. It is not a solicitation, a recommendation or advice to buy or sell any security or investment product. Information provided in each post does not constitute investment advice.

Thursday, July 31, 2014

[910am] ES/NQ update -
Month end. With the overnight drop in ES, SPX cash looks to complete point 3 based on a potential symmetry discussed in yesterday's update. NQ remains contained in an ABC channel at the moment. See charts.

Wednesday, July 30, 2014

[EOD] Stocks -
It's interesting to monitor the potential trajectory of SP500 based on the symmetry outlined in Chart 1. While the symmetry tracking can end at any time and any point, one can make the following observations.

[1] For the very term term, SPX is on its way up to point 4 (or is just about to wrap up the decline to point 3).
[2] Potential new highs at point 4 and point 6 are not guaranteed and may be marginal at best.

Tuesday, July 29, 2014

[12:15pm] SPX/ES update-
Partial but acceptable gap fill in ES/SPX. Near term tracking counts in Chart 2 by color. The black count describes a five-down off the orthodox high, followed by an upward expanded flat rebound to this mornings high. Interestingly, this mornings high marked the 0.618 retrace for the said decline.

Friday, July 25, 2014

As convenient as it may be to track an impulse wave decline (and perhaps consider a top call) given Friday's decisive sell-off in stocks, we have to reconcile or live with the fact the different benchmark indexes have registered their nominal highs on different days or different hours of the day. Chart 1 highlights the asynchronous nominal highs. (Another challenge is the location of Friday's gap at the open. See discussion below.)

If one works with the assumption that stocks have not only registered working tops here but also topped at the same time, it is likely best to track the sell-off from an orthodox high.

Chart 2 (red count) illustrates the idea with the SP500. Chart 3 and Chart 4 offer the same perspective on the Dow and the NDX, with terminal triangles prior to the proposed orthodox highs.

If so, Friday's low would be the end of an initial five-wave decline (wave i down). A counter-trend (wave ii up) rebound is likely in progress. Further selling should surface following the rebound.

While the asynchronous tops among indexes are probable in theory, they are also the principal challenge to a top call. The other major challenge to a top call is the location of the still-unfilled gap at Friday's open. Odds favor the gap to be filled before long. See our analysis in This Gap is Different (8/23/13) . In this case, new highs are probable since these gaps are only points way.

The blue counts in Chart 2 to Chart 4 track this top bullish scenario, where one more new high comes next.

Wednesday, July 23, 2014

[EOD] Stocks-
ES spent the session around the potential neckline and is also wedging. See charts.

[910am] ES update-
"Breakout" support in ES held overnight at 1972.25. An inverse H&S with respect to the green neckline a possibility if the market chooses to deliver - right shoulder to around 1950. See chart.